Like most communities and States in the United States of America, the value of Connecticut homes has declined sharply since 2008. The condition of the real estate market has generated some new financing terms. Two of these terms are cash back rebates and buyers cash rebates. In most instances buyers receive a 2 percent rebate of the purchase price when buying a home. For example, the buyer purchases a home for $200,000. Upon closing the sale and completing all the paperwork, the buyer receives a $4,000 rebate which can be used however the buyer sees fit.
The cash rebate comes from the broker’s sales commission. The commission is usually distributed with 3 percent going to the seller’s broker and 3 percent going to the buyer’s broker. In order to stimulate sales the broker will give 2 percent to the buyer in cash, and only keep the 1 percent commission, that is, 1 percent of the purchase price. The seller, the buyer and both brokers win with the cash rebate. Even the buyer’s broker is happy. Despite the fact that he gave two thirds of his commission to his client, he gets to keep 1 percent and the cash rebate effectively encouraged the sale.
This does not involve your traditional real estate broker, and the disbursement of the commission money may differ in each situation. Brokers at a Connecticut real estate brokerage firm, SGI Realty One, promote this type of creative financing. Cash back rebates surely resulted from the real estate crash of 2008 when many home owners were not able to meet the financial demands of ever escalating adjustable rate mortgage payments. The value of homes dropped dramatically, and even home owners that could manage to pay the mortgage payments found themselves in an up side down position with the current home value.
There are two sides to these real estate stories. Home owners who had adjustable rate mortgages could not keep up with escalating mortgage payments. The market saw an unprecedented amount of foreclosures and short sales. Home prices dropped and suddenly people who could not afford to buy a home found that they could become a homeowner. Brokers saw an opportunity to encourage buyers and earn commissions. Getting 1 percent of a commission beats getting 3 to 6 percent of nothing.
One example of the trend is Bethel, Connecticut. The data show that in year 2006 the low, mid and high prices of homes were $306,000, $419,000 and $551,000. Fast forward to the first quarter of 2010 and the low, mid and high prices are $196,000, $319,000 and $363,000 respectively. The net result has been some very financially stressed homeowners, foreclosures and a drop in the home values.
SGI Realty One’s promise to rebate 2 percent of the sales commission comes in writing before the potential buyer purchases a home. There is a schematic shown on the SGI Web site demonstrating the flow of a home’s sales commission. Cash back rebates have proven to be a practical solution to the problems of many.
As your broker, SGI Realty One will work to get the buyer the lowest price possible. Buyers need this type of representation, since seller’s brokers aim to get the price as high as possible. Buyers’ rebates are guaranteed long before a home is purchased. SGI will do a lot of the legwork for the buyer, and get the buyer a cash rebate.
The cash rebates that are working for Connecticut homes have proven effective in other parts of the country. With more homes on the market than buyers wanting to purchase them, the law of supply and demand kicked in and the prices of homes declined. The good news is buyers can get much more house for less money. This coupled with buyers cash rebates will hopefully help improve the real estate market.
Looking for more info on Connecticut homes sales and cash back rebates ? Get the ultimate low down now in our complete cash rebates review.
|
|